Rental Portfolio Loans Georgia
Investors often believe that the best way to maximize a real estate business is by simply acquiring more rental properties. By adding properties to their portfolio, investors are able to earn passive income while also generating equity in their investment.
Clients might consider rental portfolio loans if they want to invest in more properties, but they would need to find a lender that could provide the best deal. And a good deal requires a lender who understands portfolio loans and how to structure them properly.
Even portfolio lenders have different, and often unique, strategies for portfolio loans, so investors should work with a lender that provides the best portfolio lending program. So contact us today to learn more about how we structure these financing options.
Georgia Rental Portfolio Loans – What Are They?
Rental portfolio lending is great for someone trying to consolidate their mortgage in one monthly payment. They are especially suitable if you’re struggling with the difficulty of getting a loan to buy real estate in Georgia or surrounding states.
A portfolio mortgage is a long-term, amortized mortgage that can be originated and held in the bank’s (or private lender’s) portfolio over an extended amount of time. This enables borrowers to get approved relatively easily by traditional lenders or via private financing options like with Venus Capital. It’s a great alternative to bank mortgages, portfolio loans and portfolio refinance options.
This type of rental loan product is an attractive option for buy-to-rent investors who wish to consolidate their whole portfolio on one loan at a better interest rate. It’s also suitable for real estate entrepreneurs that own 5 or more properties whom want to consolidate all real estate financing into one business loan.
How do rental portfolio loans work?
Obtaining a rental portfolio loan can be done a few ways. The most traditional in the banking world would be to go to your local or large bank, but lenders like Venus Capital provide people with other options as well.
Banks traditionally underwrite or create loans according to a government’s outlined standards. Most banks require that applicants meet the minimum requirements of credit score, down-payment amount, debt to income ratio or loan limit, among many other criteria. This can make it challenging for new investors or ones with penalties in their credit.
The bankers criteria is followed because they are typically seeking to sell their loans on a secondary mortgage market, possibly to government sponsored entities. The reason is so that they can recapitalize and procure more loans.
The process of providing a mortgage for portfolio loans in Georgia is difficult. A lender who wants to provide portfolio loans needs to be careful and respect the guidelines that follow when trying to sell it on the secondary market.
Lenders who provide portfolio loans are typically looking to finance owners of 5 or more units with less strict approval criteria in exchange for higher interest rates, origination fees, and prepayment penalties. They also have the option of underwriting a rental loan to achieve their desired criteria because they hold 100% of the risk. This is typically a process that most (if not all) private lenders will do too. Underwriting portfolio loans happens in all aspects.
This is a big separation between portfolio lenders and traditional banks who either do not offer portfolio loans or require portfolio loan transactions to be pooled with other portfolio properties. In order to promote portfolio lending, there are a few guidelines that should be followed:
· The borrower(s) should a landlord for at least 3 years.
· A borrower should not have liabilities or liens on other properties owned by the borrower.
· All outstanding loans must be in good standing with no late payments or skipped payments within the last 12 months
Advantages of a Portfolio Loan
The other benefits of a rental portfolio loan is the fact that it is not limited to conforming loan limits. Aside from this, the lender can set down any payment requirement – at times, even favorably for you. Private Mortgage Insurance (PMI) may also not be required from banks, even if you’re making a small down payment.
Another common use for these types of portfolio loans is leveraging them to clear debt so you can invest in additional properties or get more working capital. Often, real estate assets involve capital projects that require an influx of cash for rehabilitation and opening up more properties with the money saved from cleared debt frees up more funds for making said capital investments. Huge savings in one closing for 3-10+ properties
Where can you get loans from a lender like this?
You can usually get a rental portfolio loan from your local bank or private lender. Portfolio lenders specialize in lending to real estate entrepreneurs owning five or more properties who want to consolidate their financing in order to save money and invest in new projects. A portfolio lender can help because they are more likely to offer financing options for the owner of multiple properties.
And often, they tend to offer fewer credit requirements than larger banks. This makes it all the more convenient and easier for investors interested in Georgia real estate to get loans. On the other hand, big lending institutions may not finance ambitious Maryland property developers if they already have owned four mortgages from large national US-based banks–even if these large lending institutions show great credit results for the borrower.
Rental Portfolio Requirements in Georgia
A rental portfolio loan can be a great option for self-employed, freelancers with tarnished credit histories, those who need to consolidate loans or refinance due to foreclosure or other issues. It is also viable and may not be an issue if the borrower earns a high income but has a low credit score. You could get up to 75% of the value of the portfolio in cash quickly.
These loans from banks are rare because the lender has full liability if the borrower defaults. The loans, however, are usually given to more dependable customers with track records of great credit. That’s where a more flexible financing option like Venus Capital comes in.
The lender must also examine their requirements, such as the borrower’s ability to repay debt and that it doesn’t involve an unreasonable amount of risk.
Here’s some of the requirements for Venus Capital when looking at Georgia rental portfolio loans:
- 5-20 Rental Properties, Min 60k per door.
- Single- Family, Townhomes, Multifamily properties
- Stabilized (leased) portfolio with rent roll and DSCR 1.2
- $600k to $20mn+
- Up to 75% of value
- 5 or 10 year fixed with 30 year amortization
- Purchase or Refinance
- Non-recourse options available
- Foreign nationals eligible with Perm Residency
- Serving Columbus, Cincinnati , Maryland, North Carolina, Atlanta, Ohio, on priority, besides 40 other states nationwide (except CA, Dakotas)
How do you get a rental portfolio loan in Georgia?
Since these loans aren’t generally advertised, they’re only a perk that aids lenders to get more business or reward good customers. One of the best ways is to get in touch with a high quality lender like Venus Capital. We have extremely fast turnaround times and excellent customer service. Our experienced staff can provide money up front in as little 10 days. Give us a call and let’s connect.
The alternative is becoming well acquainted with one of the local banks in your area to help expedite the process when obtaining a unique loan.
The long-term benefits of building a relationship with a bank branch officer is a great investment. However, this method may not work if you run into money problems before developing enough trust to open the proper accounts and relationship channels. Plus there is always a chance of turnover in bank management.
Make an appointment with our helpful advisers to find the right loan product that meets your business needs and see rental portfolio loan rates
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